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Thermo Fisher Scientific Inc (NYSE:TMO)
Beneish M-Score
-2.53 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Thermo Fisher Scientific Inc has a M-score of -2.53 suggests that the company is not a manipulator.

TMO' s Beneish M-Score Range Over the Past 10 Years
Min: -2.98   Max: -0.55
Current: -2.53

-2.98
-0.55

During the past 13 years, the highest Beneish M-Score of Thermo Fisher Scientific Inc was -0.55. The lowest was -2.98. And the median was -2.47.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Thermo Fisher Scientific Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.0641+0.528 * 1.0096+0.404 * 0.9743+0.892 * 1.0695+0.115 * 1.0446
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9837+4.679 * -0.0239-0.327 * 1.1882
=-2.53

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Sep16) TTM:Last Year (Sep15) TTM:
Accounts Receivable was $2,895 Mil.
Revenue was 4490.9 + 4535.2 + 4294.8 + 4652.5 = $17,973 Mil.
Gross Profit was 2053.9 + 2078.5 + 1957.9 + 2108.3 = $8,199 Mil.
Total Current Assets was $8,204 Mil.
Total Assets was $48,011 Mil.
Property, Plant and Equipment(Net PPE) was $2,599 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,709 Mil.
Selling, General & Admin. Expense(SGA) was $4,901 Mil.
Total Current Liabilities was $5,260 Mil.
Long-Term Debt was $16,940 Mil.
Net Income was 473.5 + 516.6 + 402.2 + 602.6 = $1,995 Mil.
Non Operating Income was -10.3 + -10.9 + 0.5 + -13.2 = $-34 Mil.
Cash Flow from Operations was 771.8 + 889.5 + 289.1 + 1228.1 = $3,179 Mil.
Accounts Receivable was $2,544 Mil.
Revenue was 4123.2 + 4270.9 + 3918.8 + 4492.8 = $16,806 Mil.
Gross Profit was 1883.3 + 1941.8 + 1822.5 + 2091.9 = $7,740 Mil.
Total Current Assets was $6,026 Mil.
Total Assets was $41,147 Mil.
Property, Plant and Equipment(Net PPE) was $2,392 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,692 Mil.
Selling, General & Admin. Expense(SGA) was $4,658 Mil.
Total Current Liabilities was $5,735 Mil.
Long-Term Debt was $10,278 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(2895.1 / 17973.4) / (2543.9 / 16805.7)
=0.16107692 / 0.15137126
=1.0641

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(7739.5 / 16805.7) / (8198.6 / 17973.4)
=0.46052827 / 0.45615187
=1.0096

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (8204.4 + 2599.3) / 48010.7) / (1 - (6025.9 + 2392.2) / 41147.1)
=0.77497308 / 0.7954145
=0.9743

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=17973.4 / 16805.7
=1.0695

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(1692.4 / (1692.4 + 2392.2)) / (1708.7 / (1708.7 + 2599.3))
=0.41433678 / 0.39663417
=1.0446

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(4901 / 17973.4) / (4658.3 / 16805.7)
=0.27268074 / 0.27718572
=0.9837

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((16940.4 + 5259.9) / 48010.7) / ((10277.9 + 5735.1) / 41147.1)
=0.46240317 / 0.38916473
=1.1882

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(1994.9 - -33.9 - 3178.5) / 48010.7
=-0.0239

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Thermo Fisher Scientific Inc has a M-score of -2.53 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Thermo Fisher Scientific Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.72650.4050.94640.99031.00831.10040.93261.02840.98711.0242
GMI 1.09741.05950.97421.00640.96761.00240.96961.00220.95220.9703
AQI 1.2490.99820.95580.99371.01581.02461.00310.83381.24641.0113
SGI 1.442.57051.07710.9631.06721.08691.06691.04641.29021.0045
DEPI 1.89810.43010.97541.03251.05041.03130.94411.00460.88171.0042
SGAI 1.0120.89320.98061.02940.99231.01781.00580.98171.10110.9378
LVGI 0.68750.91340.90881.01291.02271.8861.0061.19181.04250.9249
TATA -0.0113-0.0341-0.0208-0.0365-0.0203-0.0146-0.0315-0.0214-0.0173-0.0202
M-score -1.12-1.77-2.56-2.70-2.52-2.66-2.65-2.64-2.28-2.52

Thermo Fisher Scientific Inc Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
DSRI 1.20091.04670.98710.76880.87350.95781.02421.02490.98571.0641
GMI 0.99620.97220.95220.92530.91520.9420.97031.00021.01361.0096
AQI 1.10261.12471.24641.00980.9790.98241.01130.99320.99880.9743
SGI 1.16491.23141.29021.22481.13231.05941.00451.02581.04461.0695
DEPI 1.07890.96230.88170.73420.82690.92891.00421.0411.01681.0446
SGAI 1.05651.08741.10111.04521.00480.96470.93780.94090.95850.9837
LVGI 1.28611.27171.04250.93990.94910.94340.92490.99771.0121.1882
TATA -0.0162-0.0177-0.0173-0.0208-0.0123-0.0139-0.0202-0.0238-0.0267-0.0239
M-score -2.28-2.39-2.28-2.64-2.59-2.55-2.52-2.53-2.57-2.53
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